Source · Select Committees · Culture, Media and Sport Committee
Recommendation 3
3
Accepted
Exclude fan tokens from all measurements of fan engagement in professional sports regulation.
Recommendation
The recent plateaus in professional sports leagues’ revenues and the zero-risk nature of crypto revenue for clubs has incentivised partnerships between professional sport and crypto companies. However, the unique relationship between clubs and fans means that fan speculation on sport-based cryptoassets carries a real risk of financial harm to fans and reputational harm to clubs. We are also concerned that clubs may present fan tokens as an appropriate form of fan engagement in the future, despite their price volatility and reservations among fan groups. We recommend that any measurement of fan engagement in sports, including in the forthcoming regulation of football, should explicitly exclude the use of fan tokens. (Paragraph 29) Advertising
Government Response Summary
The government accepts the recommendation, stating that the new Independent Football Regulator will explicitly exclude fan tokens from its assessment of whether a club has met the required standard for fan engagement, focusing instead on structures for consulting representative supporter groups.
Government Response
Accepted
HM Government
Accepted
As announced in the King’s Speech, the Government will bring forward legislation to introduce a new Independent Football Regulator. In recognition of the crucial role that fans play, the Independent Football Regulator (IFR) will require all licensed clubs to consult a representative group of supporters on key decisions and issues, alongside strong new legal protections for vital heritage assets such as stadiums, badges and home shirt colours. The approach we are taking on fan engagement will allow the IFR to recognise the circumstances of individual clubs and allow them to implement solutions which work for them and their fanbase, while ensuring the IFR has a duty to apply sufficient oversight and standards for clubs. The IFR will assess the structures which underpin fan engagement at clubs and the outcomes which flow from that independently from the leagues. The IFR will therefore expect to assess evidence from fan representatives as well as the club itself and have the power to specify conditions for how the representative group should be constituted where necessary. Although some clubs do utilise ‘fan tokens’, this will not form part of the IFR’s assessment of whether a club has met the required standard for fan engagement – which will review the structures in place for consulting a representative group of supporters. We have no broader plans to measure fan engagement. Digital and virtual innovation may present positive opportunities for the sport sector to broaden their fan offer, but we are equally mindful of the need for transparency and protection of fans’ interests where there is any element of speculation. The expansion of the FCA’s remit into the regulation of cryptopromotion is one such protection in this space.